Suppose that you are using the exponential smoothing forecasting method, and this period's forecast (Ft) was 100% accurate (i.e., no error). If a = .5, which of the following is definitely true?
a) Next period's forecast will also be 100% accurate.
b) Next period's forecast equals this period's actual.
c) This period's forecast must be thrown out, and next period's forecast equals Ft-1 + a (At-1 a - Ft-1).
d) Next period's forecast equals 50% of this period's forecast.
e) Next period's forecast equals 50% more than this period's forecast.
Answer: b) Next period's forecast equals this period's actual.